TennCare suppliers worried about new payer

TennCare suppliers worried about new payer

August 11th, 2010 by Emily Bregel in Healthlocal

Local medical equipment suppliers are worried their TennCare patients soon could be hard-pressed to buy home medical equipment locally.

Aiming to cut costs, BlueCross BlueShield of Tennessee has signed a deal to turn over benefits administration for home medical equipment and supplies for the insurer's TennCare enrollees to a Connecticut-based company, CareCentrix.

Starting Nov. 1, local durable medical equipment suppliers participating in TennCare must contract with and get paid by CareCentrix instead of BlueCross. CareCentrix also must develop and maintain BlueCross' TennCare network of suppliers for those home health services.

But local medical equipment suppliers say the move could hinder access to supplies for TennCare enrollees if CareCentrix can't establish a robust local vendor network. They say CareCentrix is offering far-too-low reimbursement rates that might prevent many equipment providers from contracting with the company, leaving a void when BlueCross terminates its contracts with those providers on Nov. 1.

"If CareCentrix's present reimbursement rates are not raised, there will be a lack of accessibility and safety for the medically fragile children of this state," said Thomas Henley, who runs Henley Medical on McCallie Avenue. He provides specialty medical equipment to many children with TennCare coverage.

On average, medical equipment suppliers would see up to a 15 percent cut in reimbursements from CareCentrix, compared to their payments from Volunteer State Health Plan, a BlueCross subsidiary that administrates the TennCare networks, said BlueCross spokeswoman Mary Thompson.

Eric Reimer, chief executive officer of CareCentrix, said the company has administered Cigna Healthcare's durable medical equipment network for commercial enrollees since 1996 and already has a foothold in Tennessee among providers.

"We absolutely want a broad network," he said. "We have quality standards and rates standards and, if folks will meet those quality standards and accept the rates, we allow them in our network."

About 60 of the 268 Tennessee medical equipment suppliers now contracted with BlueCross subsidiary Volunteer State Health Plan also are under contract with CareCentrix in some network, although that doesn't necessarily mean they'll participate in the TennCare network, too, said Thompson.

BlueCross doesn't yet know how many medical suppliers have agreed to be part of CareCentrix's TennCare network for durable medical equipment since offers just went out last week, she said.

"The hope would be since they're familiar with CareCentrix ... then they would likely be more inclined to sign up with CareCentrix for the purposes of delivering services to our TennCare members, but that isn't 100 percent guaranteed," Thompson said.

Lookout Medical Services in Chattanooga has received a contract proposal from CareCentrix and the rates were at or below the company's costs, said Bob Perry, co-owner of Lookout Medical Services on Cromwell Road.

"A lot of their fees will not cover our costs of doing business," he said.

ContinuCare, the home health subsidiary of Erlanger Health System, may not participate in CareCentrix's network this year due to "concerns over rates that do not adequately cover the cost to provide the equipment and the service," according to an e-mail from Donna Bourdon, senior vice president and administrator for ContinuCare. Negotiations are under way, she said.

Reimer said health plans and hospitals will benefit from having a single point of contact for their TennCare patients' medical equipment needs, such as electric wheelchairs, CPAP machines to treat sleep apnea or hospital beds.

For example, hospital discharge planners won't have to call four or five durable medical equipment companies to find a provider for patients leaving the hospital - they can just call CareCentrix people who will coordinate that case, he said.

"For the discharge planners, we're going to make their lives easier," he said.

Eddie Jenkins, durable medical equipment manager for Access Family Pharmacy, worries that the added layer of bureaucracy - BlueCross paying CareCentrix to pay providers, instead of BlueCross paying providers directly - could result in delays for patients and wouldn't necessarily be more efficient.

"I don't see where the savings are if you add a middle man," he said.

BlueCross officials said the change will improve quality of care and ensure access for patients.

"We understand (medical suppliers) are upset, but our responsibility is to be good stewards of the budget that the state gives us for the program," said Roy Vaughn, director of communications for BlueCross. "We look at it as, 'Are we providing the right access? Can we be assured that TennCare members have the same access to services they had before, if not better?"